Reporting self-employment income to the Marketplace

When you fill out a Health Insurance Marketplace application, you’ll have to estimate your net self-employment income. Marketplace savings are based on your estimated net income for the year you’re getting coverage, not last year’s income.

Estimating unpredictable income

When you’re self-employed, it can be hard to estimate your income for the coming months or year.

Do your best to estimate your self-employment income and expenses for the year accurately, based on your past experience, realistic expectations, industry standards, and other information.

During the year, if it looks like your yearly net income will be higher or lower than you estimated, update your Marketplace application as soon as possible.

IMPORTANT Update your estimated annual net income when your business circumstances change. If you wind up making more than you reported on your Marketplace application, you could have to pay back some or all of the premium tax credits you took during the year. If you wind up making less, you could qualify for more savings than you claimed during the year. Learn how to update your income when it changes.

Filling out your Marketplace application

On your Marketplace application, you’ll report your net income from your self-employment. (Net income is sometimes called "profit.")

If your self-employment income is higher than your business expenses, you report this net income.

If your business expenses are higher than your income, you report a net loss.

If you’re asked to verify self-employment income to resolve an inconsistency

Inconsistencies are situations when you need to confirm information you put on your Marketplace application, or to provide additional information. You can usually resolve an inconsistency by uploading documents.

If you’re self-employed, you may be asked to upload a “self-employment ledger” to verify your income. There isn’t a standard self-employment ledger format. It just needs to provide an accurate, detailed record of your self-employment income and expenses.

When you fill out your application and select “self-employment,” you’ll describe the kind of work you do. There’s no special format – just describe the work. If you clean houses, enter “house cleaning.” If you make jewelry, enter “jewelry making.” If you work on construction projects, enter “construction.” For more information, visit "Instructions for Schedule C" from the IRS or IRS Publication 334 (PDF).